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Gold having value over a long period of time is a counter argument. Nobody is transacting in gold yet it is valuable.

bitxbitxbitcoin 4y ago
If anything this is an argument for Bitcoin also having “value” without being used by the average Joe for day to day transactions like buying a coffee.
zach_garwood 4y ago
Gold has utility. You can't make circuits out of Bitcoins.
- nightski 4y ago
  But most Gold is not used for circuits. Not only that, gold can be mined on demand and has an ever increasing supply (gold does not really disappear).
  - cowtools 4y ago
    Sure, but a not-insignificant amount of gold is still used for industrial applications. Even if gold wasn't used as money or in jewlery, I imagine it would still be quite expensive: at least half of it's current price. The same could be said of other precious metals. But I don't think you can say the same about bitcoin. Bitcoin's fundamental utility is low, even compared to other cryptocurrencies. Gold has useful unique properties over other metals. Bitcoin does not even have useful unique properties over other cryptocurrencies.
    - daniel-cussen 4y ago
      It would definitely be worth half its price as a reserve currency for purely industrial reasons, if not a bit more. Like if it became impossible to balance payments with it, well like if it became irradiated long-term like in Goldfinger, but there was still some clean gold left and it was just for industry. People would totally invent new uses for it at half the price. They just don't even consider it because it's expensive.
      - cowtools 4y ago
        This reminds me, I was looking at the periodic table the other day and I noticed that gold actually has a pretty high electronegativity: almost as high as carbon! https://mappingignorance.org/2017/02/09/electronegative-gold/ https://mappingignorance.org/2017/02/09/electronegative-gold... Makes me wonder if there are a ton of unexplored properties and usecases for rare metals that we just haven't discovered yet.
- lamp987 4y ago
  You think gold has the value it has because a miniscule amount of it is used in circuits?
  - cowtools 4y ago
    I think it has a more stable value if the demand for gold is more diversified across industries.
hans1729 4y ago
That's not right. One: gold is the og currency, it doesn't have to prove its value because it already did. Two: it is also being actively used for transactions, look no further than jewelry. If you have gold, you will find someone who is willing to exchange it for something else with material value in any city on the planet. This is not the case for crypto.
- capableweb 4y ago
  > This is not the case for crypto No? You don't think the following statement is as true as the one you made? "If you have Bitcoin, you will find someone who is willing to exchange it for something else with material value in any city on the planet" My experience would tell me otherwise, but maybe I'm a outlier.
  - hans1729 4y ago
    Scenario: a country-wide blackout occurs. You're haggling with local farmers for food. Which has value to them, bits on a hard drive or solid gold?
    - cowtools 4y ago
      I agree with your point, but consider the following: 1: Cryptocurrencies can still operate over distributed mesh networks or sneaker-nets in a semi-doomsday scenario. 2: With gold, it is difficult to verify its authenticity vs some impostor alloy without the necessary tech/knowledge. Edit: the bottom line is that in a doomsday scenario, people have little use for bitcoins or shiny yellow rocks.
      - ludston 4y ago
        You can verify gold with a vessel of water, an already verified piece of gold and a set of scales. It's taught in story form to primary age children with the famous quote "Eureka I found it!"
        4y ago
NhanH 4y ago
For a long time (thousand of years), people in Asia transacted in gold for high value items. My parents bought my childhood home with physical gold bars (around ~3.5kg gold, in bar of 37.5g each)
michael1999 4y ago
That is incorrect. The Bank of International Settlement definitely uses gold for payment. In rare events, a country will do physical settlement via shipping, but it is usually done via paper claims. https://www.bis.org/banking/balsheet/statofacc200831.pdf https://www.bis.org/banking/balsheet/statofacc200831.pdf
treeman79 4y ago
Long hold for Aluminum didn’t exactly work out. https://www.americaslibrary.gov/jb/gilded/jb_gilded_monument_3.html https://www.americaslibrary.gov/jb/gilded/jb_gilded_monument... I actually agree with you. :)
smt88 4y ago
Gold has thousands of years of history as a currency (or backing a currency). It's also intrinsically valuable for jewelry and industrial purposes. It's irreplaceable in electronics, for example. Cryptocurrency that can't be sold to someone else has absolutely no value. In fact, it has negative value because of transaction fees, something that plain cash doesn't have. I can send someone $100k with a $0 transaction fee.
- hinkley 4y ago
  Gold also has enough value as a material to both lift the value of it and complicate the making of things with it. First silver, then gold, then platinum, now palladium and rhodium have ridiculous values associated with them.
pmw 4y ago
Both the argument and your counter argument are discussed by Lyn Alden here: https://www.lynalden.com/cryptocurrencies/ https://www.lynalden.com/cryptocurrencies/. She proposes three ways, including valuing cryptocurrency as we do precious metals.

If anything this is an argument for Bitcoin also having “value” without being used by the average Joe for day to day transactions like buying a coffee.

zach_garwood 4y ago

Gold has utility. You can't make circuits out of Bitcoins.

nightski 4y ago
But most Gold is not used for circuits. Not only that, gold can be mined on demand and has an ever increasing supply (gold does not really disappear).
- cowtools 4y ago
  Sure, but a not-insignificant amount of gold is still used for industrial applications. Even if gold wasn't used as money or in jewlery, I imagine it would still be quite expensive: at least half of it's current price. The same could be said of other precious metals. But I don't think you can say the same about bitcoin. Bitcoin's fundamental utility is low, even compared to other cryptocurrencies. Gold has useful unique properties over other metals. Bitcoin does not even have useful unique properties over other cryptocurrencies.
  - daniel-cussen 4y ago
    It would definitely be worth half its price as a reserve currency for purely industrial reasons, if not a bit more. Like if it became impossible to balance payments with it, well like if it became irradiated long-term like in Goldfinger, but there was still some clean gold left and it was just for industry. People would totally invent new uses for it at half the price. They just don't even consider it because it's expensive.
    - cowtools 4y ago
      This reminds me, I was looking at the periodic table the other day and I noticed that gold actually has a pretty high electronegativity: almost as high as carbon! https://mappingignorance.org/2017/02/09/electronegative-gold/ https://mappingignorance.org/2017/02/09/electronegative-gold... Makes me wonder if there are a ton of unexplored properties and usecases for rare metals that we just haven't discovered yet.
lamp987 4y ago
You think gold has the value it has because a miniscule amount of it is used in circuits?
- cowtools 4y ago
  I think it has a more stable value if the demand for gold is more diversified across industries.

hans1729 4y ago

That's not right. One: gold is the og currency, it doesn't have to prove its value because it already did. Two: it is also being actively used for transactions, look no further than jewelry. If you have gold, you will find someone who is willing to exchange it for something else with material value in any city on the planet. This is not the case for crypto.

capableweb 4y ago
> This is not the case for crypto No? You don't think the following statement is as true as the one you made? "If you have Bitcoin, you will find someone who is willing to exchange it for something else with material value in any city on the planet" My experience would tell me otherwise, but maybe I'm a outlier.
- hans1729 4y ago
  Scenario: a country-wide blackout occurs. You're haggling with local farmers for food. Which has value to them, bits on a hard drive or solid gold?
  - cowtools 4y ago
    I agree with your point, but consider the following: 1: Cryptocurrencies can still operate over distributed mesh networks or sneaker-nets in a semi-doomsday scenario. 2: With gold, it is difficult to verify its authenticity vs some impostor alloy without the necessary tech/knowledge. Edit: the bottom line is that in a doomsday scenario, people have little use for bitcoins or shiny yellow rocks.
    - ludston 4y ago
      You can verify gold with a vessel of water, an already verified piece of gold and a set of scales. It's taught in story form to primary age children with the famous quote "Eureka I found it!"
      - 4y ago

NhanH 4y ago

For a long time (thousand of years), people in Asia transacted in gold for high value items. My parents bought my childhood home with physical gold bars (around ~3.5kg gold, in bar of 37.5g each)

michael1999 4y ago

That is incorrect. The Bank of International Settlement definitely uses gold for payment. In rare events, a country will do physical settlement via shipping, but it is usually done via paper claims. https://www.bis.org/banking/balsheet/statofacc200831.pdf https://www.bis.org/banking/balsheet/statofacc200831.pdf

treeman79 4y ago

Long hold for Aluminum didn’t exactly work out. https://www.americaslibrary.gov/jb/gilded/jb_gilded_monument_3.html https://www.americaslibrary.gov/jb/gilded/jb_gilded_monument... I actually agree with you. :)

smt88 4y ago

Gold has thousands of years of history as a currency (or backing a currency). It's also intrinsically valuable for jewelry and industrial purposes. It's irreplaceable in electronics, for example. Cryptocurrency that can't be sold to someone else has absolutely no value. In fact, it has negative value because of transaction fees, something that plain cash doesn't have. I can send someone $100k with a $0 transaction fee.

hinkley 4y ago
Gold also has enough value as a material to both lift the value of it and complicate the making of things with it. First silver, then gold, then platinum, now palladium and rhodium have ridiculous values associated with them.

pmw 4y ago

Both the argument and your counter argument are discussed by Lyn Alden here: https://www.lynalden.com/cryptocurrencies/ https://www.lynalden.com/cryptocurrencies/. She proposes three ways, including valuing cryptocurrency as we do precious metals.